This case is before the Authority on a negotiability
appeal filed by the Union under section 7105(a)(2)(E) of the Federal Service
Labor-Management Relations Statute (the Statute). The case concerns the
negotiability of three provisions of a negotiated agreement which were
disapproved by the Department of the Navy under section 7114(c) of the Statute.

Provision 1 requires the Agency to make a diligent effort
to provide an employee, returning to duty after an illness or injury, with
temporary work consistent with any limitations substantiated by a physician's
certification. Provision 2 requires that performance evaluations take into
account factors beyond an employee's control which may cause the employee to
fall below a specific performance level. Provision 3 prescribes the methods for
identifying which employee or employees will be transferred from one field
office to another if a reduction in personnel is necessary.

For the following reasons, we find that Provision 1 is
negotiable as an appropriate arrangement within the meaning of section
7106(b)(3) of the Statute. We find that Provision 2 directly interferes with
management's rights, under section 7106(a)(2)(A) and (B), to direct employees
and to assign work. We find that Provision 3 is negotiable because it does not
directly interfere with the Agency's exercise of its rights, under section
7106(a)(2)(A) and (C), to assign employees and to select candidates for
positions from any appropriate source.

II. Provision 1

Article XII. LEAVE AND RELATED ADMINISTRATIVE
PROCEDURES. Section 2f. For an employee requesting return to duty from sickness
or injury with temporary limitations placed on his performance, as
substantiated by a doctor's certificate, the Employer will make a diligent
effort to assign the employee to available work within these
limitations.

A. Positions of the Parties

The Agency contends that because Provision 1 imposes
restrictions on the assignment of work independent of the restrictions
prescribed by the Agency's own medical authorities, the provision interferes
with its rights to assign employees and work under section 7106(a)(2)(A) and
(B) of the Statute. The Agency further argues that Provision 1 is not an
"appropriate arrangement" within the meaning of section 7106(b)(3) of the
Statute because it precludes the Agency "from exercising its right to assign
work, rather than ameliorating adverse effects flowing from the exercise of
that right[.]" Statement of Position at 5.

The Union asserts that Provision 1 is intended "to
function as an appropriate arrangement for employees who are facing temporary
medical restrictions and who may be adversely affected by the exercise of
management's right to assign employees and work under section 7106(a)(2)(A) and
(B)." Reply Brief at 1-2. The Union states that the provision is designed to
protect those employees' job security and to safeguard them against the danger
of further illness or injury. The Union asserts that:

[The provision] simply requires the agency to assign
available work to employees within the limitations set by a physician. The
agency is not obligated to find work for an employee within the
prescribed restrictions. Instead, the agency need only make a reasonable effort
to find an assignment, and then only when work is available and the employee is
qualified for the job.

Reply Brief at 2 (emphasis in original). The obligation to
make a reasonable effort to find appropriate work for the covered employees,
the Union argues, is far outweighed by the benefits accruing to the temporarily
incapacitated employees who will be protected from additional threats to their
health.

B. Analysis and Conclusions

1. The Agency's Right to Assign Employees Under
Section 7106(a)(2)(A) of the Statute

In support of its claim that Provision 1 interferes with
its right to assign employees under section 7106(a)(2)(A) of the Statute, the
Agency merely cites National Federation of Federal Employees, Local 943 and
Department of the Air Force, Headquarter Keesler Technical Training Center,
Keesler Air Force Base, Mississippi, 19 FLRA 949 (1985) (Proposal 2)
(Keesler Air Force Base). We conclude, however, that Provision 1 in this
case is distinguishable from Proposal 2 in Keesler Air Force Base.

Proposal 2 in Keesler Air Force Base required the
agency to assist employees unable to perform their regular duties because of
illness or injury by attempting to find work assignments compatible with their
disabilities or by reshaping the regular duties of their positions. The
Authority concluded that because Proposal 2 required the agency either to
reassign employees or to redesign jobs it directly interfered with the agency's
right to under section 7106(a)(2)(A) to assign employees. Provision 1 in this
case, on the other hand, does not require reassignment or detail to another
work assignment or position, nor does it require that employees' current
positions be redesigned to comport with employees' temporary disabilities.
Rather, the provision requires only that the Agency exert a diligent effort to
find available work for disabled employees to perform. Furthermore, the Agency
acknowledges that the provision "does not oblige the [A]gency to restructure
positions to accomodate employees[.]" Statement of Position at 3. Accordingly,
there is no basis for concluding that the Provision 1 directly interferes with
the Agency's right to assign employees under section 7106(a)(2)(A) of the
Statute.

2. The Agency's Right to Assign Work Under
Section 7106(a)(2)(B) of the Statute

a. Background

In American Federation of Government Employees,
AFL-CIO, Local 1625 and Department of the Navy, Naval Air Station, Oceana,
Virginia, 30 FLRA 1105, 1119 (1988) (Provision 6) (NAS, Oceana), the
Authority reexamined the relationship between management's right to assign work
under section 7106(a)(2)(B) of the Statute and employees' safety and health.
The Authority stated the following about the relationship between an agency's
right to assign work and medical restrictions imposed on the assignment of work
by an agency's own medical authorities:

We believe that under section 7106(b)(2) of the Statute,
the procedures by which an agency exercises its right to assign work may
include restrictions on particular assignments or duties imposed by the
agency's own medical authorities. When an agency's medical authorities exercise
their responsibilities by restricting the assignment of duties to employees for
medical reasons, we find that the agency may be contractually bound to observe
those restrictions. That is, we believe that the right to assign work is a
right exercised by the agency as a whole. The right to assign work does not
entitle a portion of an agency to assign duties which are inconsistent with
those which are found by another portion of the agency to constitute a risk to
an employee's health and safety.

Id. at 1125.

Consistent with this analysis, the Authority stated that
it would examine proposals requiring management to assign, or to refrain from
assigning, certain duties for health and safety reasons to determine whether
the proposals required management to adhere to restrictions on work assignments
imposed by the agency's own medical authorities. The Authority stated that
proposals requiring work to be assigned in conformity with restrictions imposed
by the agency's medical authorities would constitute negotiable procedures
under section 7106(b)(2) of the Statute. Id.

In NAS, Oceana, the Authority also stated that
proposals restricting the assignment of work on grounds independent of and/or
in conflict with those of the agency's own medical authorities would be found
to directly interfere with management's right to assign work under section
7106(a)(2)(B). Id. at 1126. The Authority found, in addition, that the
provision in dispute in that case, which required the agency to make limited
duty assignments whether or not those assignments were recommended by the
Agency's medical authorities, did not constitute an appropriate arrangement
under section 7106(b)(3) of the Statute. The Authority held as
follows:

In our view, this provision does not address an adverse
effect which results from the exercise of management's right to assign work.
Rather, the proposal precludes the assignment of certain duties on the
assumption that if they were assigned, there would be an adverse effect. That
is, the proposal eliminates the possibility of an adverse effect by
precluding the Agency from exercising its right to assign work.

We find that the potential adverse effect is not
sufficient to establish that [the provision] is an "arrangement" for "employees
adversely affected" by the exercise of the right to assign work. Accordingly,
it is not a negotiable appropriate arrangement under section
7106(b)(3).

Id. at 1126-27 (emphasis in original).

We continue to adhere to the Authority's holding in
NAS, Oceana, that the right to assign work is a right "exercised by the
agency as a whole." Id. at 1125. In our view, an agency's right to
assign work does not encompass assignments which are inconsistent with
restrictions imposed by the agency's medical authorities. Accordingly, we
affirm the Authority's holding in NAS, Oceana, that proposals or
provisions which require an agency to observe medical restrictions on work
assignments which are imposed by the agency's own medical authorities do not
directly interfere with the agency's right to assign work.(1) As such proposals do not directly interfere with the
agency's right to assign work, there is no need to analyze whether those
proposals constitute appropriate arrangements within the meaning of section
7106(b)(3) of the Statute.

We also continue to adhere to the Authority's holding in
NAS, Oceana that requiring an agency to assign, or refrain from
assigning, certain duties based on medical restrictions independent of those
imposed by its own medical authorities directly interferes with the agency's
right to assign work. In this regard, the difference between restrictions
imposed by the agency's medical authorities and restrictions imposed by other
physicians is not superficial. That is, although we find no interference with
the agency's right when a proposal requires observance of restrictions imposed
by the agency's own authorities, we find no basis in the Statute on which to
make the same conclusion when the restrictions are imposed by other medical
authorities.(2) This is not to say, of course, that restrictions
imposed by outside, or private, physicians are, from a medical standpoint,
entitled to less weight than those imposed by agency authorities. Instead, our
conclusion is based solely on the agency's right to assign work under section
7106(a)(2)(B) of the Statute.

We will no longer adhere to the Authority's holding in
NAS, Oceana, however, that proposals or provisions which require an
agency to observe medical restrictions independent of those imposed by its own
authorities may not be "arrangements" within the meaning of section 7106(b)(3)
of the Statute. We note, in this regard, that subsequent to the Authority's
decision, the United States Court of Appeals for the District of Columbia
Circuit rejected determinations by the Authority that various proposals
concerning matters affecting job requirements of teachers did not qualify as
appropriate arrangements. Overseas Education Association, Inc. v. FLRA,
876 F.2d 960 (1989) (OEA). In particular, the Authority had held that
management's establishment of job requirements, by itself, did not adversely
affect employees within the meaning of section 7106(b)(3). See, for
example, Overseas Education Association, Inc. and Department of Defense
Dependents Schools, 29 FLRA 628 (1987), rev'd sub nom.OEA,
876 F.2d 960.

In OEA, the court concluded that the Authority's
construction of section 7106(b)(3) improperly restricted the scope of
management's obligation to bargain. Id. at 965-66. Specifically, the
court held:

Section 7106(a) . . . enumerates the prerogatives
reserved to management, but the immunity of these rights from the duty to
bargain is "[s]ubject" to Section 7106(b)(3). The latter section, in plain
English, authorizes negotiation of "appropriate arrangements for employees
adversely affected," not by a firing, demotion, or pay cut, but by "the
exercise of any authority under this section by such management
officials."

Id. at 965-66 (emphasis in original) (footnotes
omitted). The court stated that the Authority erred because it "never measured
the impact of management's changes upon the employees[,]" and remanded the
cases to the Authority to consider the facts bearing on whether the job
requirements in question adversely affected unit employees and, if so, whether
the proposed arrangements were appropriate. Id. at 973-74.

In West Point Elementary School Teachers Association,
NEA and United States Military Academy, West Point Elementary School, 34
FLRA 1008 (1990) (West Point), in light of the court's decision in
OEA, we reexamined the Authority's interpretation of section 7106(b)(3),
in the context of a provision asserted to be an appropriate arrangement for
employees adversely affected by changes in job requirements. We stated that, in
West Point and in future cases, we would examine relevant facts and
circumstances to measure the impact of management's imposition of, or changes
in, job requirements to determine whether employees were adversely affected.
West Point, 34 FLRA at 1012. We stated also that Authority decisions
which were inconsistent with this approach would no longer be
followed.

In light of the court's decision in OEA, as well
as our subsequent decision in West Point, we conclude that the approach
taken by the Authority to the analysis of proposed appropriate arrangements in
NAS, Oceana finds no basis in the Statute. That is, we find no statutory
basis for the Authority's conclusion in NAS, Oceana that a provision
which seeks to eliminate possible adverse effects is not appropriate for
consideration as an appropriate arrangement. We will, therefore, not employ
this blanket rule. Instead, we will base determinations as to the negotiability
of all proposed arrangements, including arrangements which seek to ameliorate
the adverse effects of the exercise of a management right by inhibiting the
exercise of that right, on evaluation of the facts and circumstances in each
case.

Accordingly, in this and future cases, we will analyze
proposals and provisions seeking to ameliorate the adverse effects resulting
from the exercise of a management right, including provisions like Provision 6
in NAS, Oceana and Provision 1 herein, consistent with the framework
discussed in West Point. We will, as a threshold matter, determine
whether a proposal or provision is an arrangement for employees adversely
affected by the exercise of management rights by examining "the effects or
foreseeable effects on employees which flow from the exercise of those rights,
and how those effects are adverse." National Association of Government
Employees, Local R14-87 and Kansas Army National Guard, 21 FLRA 24, 31
(1986). Proposals addressing "purely speculative or hypothetical concerns, or
which are otherwise unrelated to management's exercise of its reserved rights,"
will be excluded from consideration as appropriate arrangements. American
Federation of State, County and Municipal Employees, Local 3097 and Department
of Justice, 24 FLRA 453, 458 (1986) (Chairman Calhoun dissenting). Where an
adverse effect is reasonably foreseeable, and the disputed provision or
proposal is intended to be an arrangement for employees adversely affected, we
will proceed to examine whether the provision or proposal excessively
interferes with management's rights.

As noted above, we continue to adhere to the Authority's
holdings in NAS, Oceana that (1) proposals which require an agency to
observe restrictions on work assignments which are imposed by its own medical
authorities do not directly interfere with the agency's right to assign work;
and (2) proposals which impose restrictions independent of those imposed by the
agency's medical authorities directly interfere with the agency's right. We
will, however, no longer follow NAS, Oceana, or other cases, to the
extent that it holds that provisions such as Provision 1 here do not qualify
for consideration as appropriate arrangements under section 7106(b)(3) of the
Statute.

b. To the Extent That Provision 1 Requires the Agency
to Observe Medical Restrictions Independent of Those Imposed by Its Own Medical
Authorities, the Provision Directly Interferes With Management's Right to
Assign Work under Section 7106(a)(2)(B)

Provision 1 requires the Agency to make "a diligent
effort" to assign work to employees requesting to return to duty after an
injury or illness based on temporary limitations "as substantiated by a
doctor's certificate." We note, as a threshold matter, that a requirement that
an effort be made to assign work need not necessarily be read as encompassing a
requirement that work be assigned inconsistent with management's rights.
SeeAmerican Federation of Government Employees, Local 2298 and U.S.
Department of the Navy, Navy Resale Activity/Navy Exchange, Naval Weapons
Station, Charleston, South Carolina, 35 FLRA 1128, 1131-34 (1990) (Proposal
2).

The Union, however, interprets the provision as requiring
the Agency to "assign available work to employees within the limitations set by
a physician." Reply Brief at 2. The Union's statement is not inconsistent with
the plain wording of the provision. Accordingly, and without addressing the
extent to which we would find that the provision directly interferes with the
Agency's right to assign work in the absence of the Union's statement, we adopt
the Union's interpretation of the proposal for the purposes of this decision.

The provision does not specify whether the physician
issuing the certificate is an Agency medical authority or the employee's own
physician. In addition, although the Agency raised the issue and the
applicability of NAS, Oceana in its Statement of Position, the Union did
not address this question. Consequently, based on the plain wording of the
provision, we find that the provision would require management to adhere to
limitations established by medical authorities other than the Agency's own. As
such, Provision 1 imposes restrictions on the Agency's right to assign work
independent of any that might be imposed by the Agency's own authorities. We
conclude, therefore, consistent with our previous discussion, that the
provision directly interferes with the Agency's right, under section
7106(a)(2)(B), to assign work. SeeBremerton Metal Trades Council and
Naval Supply Center, Puget Sound, 32 FLRA 643, 646-48 (1988) (Provision
3).

c. Provision 1 Constitutes an "Appropriate
Arrangement" within the Meaning of Section
7106(b)(3)

The Union asserts that it "intends [Provision 1] to
function as an appropriate arrangement for employees facing temporary medical
restrictions who may be adversely affected by the exercise of management's
right to assign employees and work under sections 7106(a)(2)(A) and (B)." Reply
Brief at 1-2. For the following reasons, we conclude that the provision
constitutes a negotiable appropriate arrangement.

Initially, we find that Provision 1 constitutes an
arrangement for adversely affected employees under section 7106(b)(3). We agree
with the Union that the provision "affords employees already burdened by
illness or injury a reasonable protection from additional threats to their
health." Reply Brief at 3. The additional threats to employees' health
reasonably could be anticipated to flow from management's exercise of its right
to assign work incompatible with medical recommendations.

In addition, Provision 1 would ameliorate the adverse
effect on employees of not being assigned any work at all because of their
inability, for medical reasons, to perform their "regular" jobs. In such
circumstances, employees must either deplete their sick leave balances or forgo
their normal income because their sick leave balances have been exhausted. The
provision would also mitigate the adverse effect stemming from employees'
failure to satisfactorily perform their regular work because of their temporary
disabilities. Insofar as Provision 1 obligates management to exert a "diligent
effort" to find work consistent with medically-imposed limitations for
temporarily incapacitated employees, we conclude that the provision provides
performance, economic and health-related benefits to employees, and is an
"arrangement" under section 7106(b)(3).

In order to determine whether the proposed arrangement
contemplated by Provision 1 is "appropriate," within the meaning of section
7106(b)(3), we must examine whether the negative impact on management's right
to assign work is disproportionate to the benefits conferred by the provision
on employees. SeeKansas Army National Guard, 21 FLRA at 33. That
is, we must decide whether the provision excessively interferes with the right
to assign work.

Provision 1 restricts management's ability to assign work
by requiring the Agency to exert "a diligent effort" to make assignments
consistent with physicians' certifications, including those of physicians other
than those employed by the Agency. On the other hand, the Agency is only
required to make a diligent effort to find available work consistent with the
prescribed limitations and to assign it to the employee if he or she is
qualified to perform the tasks. The provision does not oblige the Agency to
create work for returning employees and does not require the Agency to assign
work to employees who are not qualified to perform the work. If no appropriate
work is available, the Agency may deny the employee's request to return to
work.

On balance, we find that the provision's negative impact
on management's right to assign work is far outweighed by the benefits the
provision confers on employees. The Agency would be required only to make
efforts to identify and assign available work to qualified employees. The
Agency would not be required to create work or to assign it to employees who
were not qualified to perform it. Employees who are under certified medical
restrictions, however, would be assured of an opportunity to be considered to
perform necessary and available work for which they are qualified, and which
would not aggravate their medical conditions. In this regard, enabling
qualified employees to perform available work which would not impede their
recovery from illness or injury provides benefits, in our view, to both the
Agency and employees. We conclude, therefore, that Provision 1 does not
excessively interfere with Agency's right to assign work and, therefore,
constitutes a negotiable appropriate arrangement under section 7106(b)(3) of
the Statute.(3)

III. Provision 2

Article VIII. PERFORMANCE APPRAISAL. Section 13.b(5). At
the end of the rating period, the supervisor's evaluation shall make allowances
for factors beyond the control of the employee which may have caused the
employee not to have achieved a specific performance.

A. Positions of the Parties

The Agency asserts that Provision 2 directly interferes
with its rights to direct employees and to assign work under section
7106(a)(2)(A) and (B) of the Statute. The Agency contends that the provision
"clearly deprives the agency of the discretion to determine whether and when
factors beyond an employee's control should be taken into consideration[]" in
evaluating, for example, the employee's ability to adapt and carry out
assignments in unforeseen circumstances. Statement of Position at 6.

The Union claims that Provision 2 does not prevent the
Agency from evaluating an employee's ability to adapt to unforeseen events.
Rather, according to the Union, the provision "simply provides that when an
employee's performance is affected by circumstances which the employee could
not reasonably control, those circumstances will at least be weighed by the
rating official." Reply Brief at 4. The Union further asserts that the
provision is consistent with applicable law in that it is intended to ensure
the accuracy of the evaluation process. Furthermore, the Union argues that the
provision is concerned with the application, not the content, of performance
standards established by the Agency.

On the other hand, proposals governing only the
application of performance standards and critical elements do not conflict with
management's rights to direct employees and to assign work. See, for
example, POPA, 25 FLRA at 385-87. Accordingly, the task in deciding
the negotiability of Provision 2 "is primarily one of determining, based on the
record, whether [it] concern[s] substantive matters, such as the content of
performance standards and critical elements, or whether [it] concern[s] the
application of those standards and elements and other nonsubstantive matters
such as procedures." Id. at 387.

With respect to the latter point, we recently have
considered proposals similar to the provision in dispute here. First, in
National Treasury Employees Union and Department of Health and Human
Services, Social Security Administration, Office of Hearings and Appeals,
34 FLRA 1000 (1990) (SSA, Hearings and Appeals), we considered the
negotiability of three provisions addressing performance evaluations. Two of
the three provisions required the agency to "consider" various factors in
assessing employee performance; the remaining provision required the agency to
"take into account" specified factors in assessing performance. We concluded
that the three provisions directly interfered with the agency's rights to
direct employees and assign work and, as relevant here, stated the
following:

The [u]nion uses the terms "consider" and "to take into
account" interchangeably. The term "consider" connotes that management will
review the specified factors but will remain free to base its decision on
grounds other than those factors. The phrase "to take into account," on the
other hand, connotes that management's decision will be based, at least in
part, on the specified factors. Because the [u]nion uses the terms
interchangeably and based on the [u]nion's statements as to the effect of the
provisions, we conclude that the provisions are intended to

require management not only to review the specified
factors in evaluating an employee's performance, but also to base its
evaluation of the employee--at least in part--on the results of that review. In
other words, the provisions are intended to require management to modify the
level of work required of an employee to achieve a given performance
rating.

Id. at 1005-06 (citations omitted).

Subsequently, in American Federation of Government
Employees, Local 3172 and U.S. Department of Health and Human Services, Social
Security Administration, Vallejo District Office, 35 FLRA 1276 (1990)
(SSA, Vallejo), we considered the negotiability of three proposals
(Proposals 1 through 3) requiring the agency to "consider" various factors,
including factors "outside the control of the employee," in assessing employee
performance. We concluded that the proposals did not directly interfere with
the agency's rights to direct employees and assign work:

The proposals would not obligate the Agency to change
any of its existing performance standards and would not inhibit the [a]gency in
promulgating new standards. The proposals, moreover, would not require the
[a]gency to revise any performance evaluations based on the identified events
or processes. Rather, the sole objective of the proposals, as described by
their wording and by the [u]nion's explanation of their intent, is to identify
certain circumstances which management should consider when evaluating employee
performance.

Id. at 1282 (citation omitted). We compared the
proposals in SSA, Vallejo to the provisions in dispute in SSA,
Hearings and Appeals. We stated that it was clear from the record in
SSA, Hearings and Appeals that "the provisions were intended to require
management not only to review the specified factors . . . but also to require
management to modify the level of work required of an employee to achieve a
given performance rating." SSA, Vallejo, 35 FLRA at 1282.

Provision 2 would require the Agency "to make allowances"
in an employee's evaluation for "factors beyond the control of the employee
which may have caused the employee not to have achieved a specific
performance." In our view, as plainly worded, the provision would require the
Agency to change or adjust its performance expectations in light of the factors
specified in the provision. That is, the requirement that the Agency "make
allowances" for certain factors encompasses more than consideration of those
factors. The provision would also require the Agency, in applying performance
standards, to modify its performance expectations in light of those factors.

Our reading of the provision is consistent not only with
the provision's plain wording but also with the Union's explanation, in its
Petition for Review, that the provision would "require the management official
evaluating an employee to make allowances for factors beyond the employee[']s
control[.]" Petition for Review at 2. We note, however, the Union's assertion
in its Reply Brief that the provision "requires only that management consider
circumstances" beyond an employee's control. Reply Brief at 4. The Union
explains also that the provision "simply provides that when an employee's
performance is affected by circumstances" beyond the employee's control, "those
circumstances will at least be weighed by the rating official."
Id.

In our view, the Union's statements in its Reply Brief
are inconsistent with the plain wording of the provision. A requirement that
the Agency "make allowances" for various factors cannot, in our view, be read
as encompassing only consideration of those factors. As the Union's statements
in its Reply Brief are inconsistent with the plain wording of the provision, we
will base our decision on the plain wording.

We find, consistent with the foregoing discussion, that
Provision 2 would require the Agency to adjust its performance expectations in
light of certain factors beyond the control of employees. As such, the
provision is similar, in effect, to the provisions in dispute in SSA,
Hearings and Appeals. Consequently, we conclude that Provision 2 directly
interferes with the Agency's rights to direct employees and assign work.

Unlike its position with respect to Provision 1, the
Union does not assert that Provision 2 is an appropriate arrangement within the
meaning of section 7106(b)(3) of the Statute. We will not, therefore, address
whether the provision excessively interferes with the Agency's rights to direct
employees and assign work. Accordingly, as Provision 2 directly interferes with
the Agency's rights, we conclude that it is nonnegotiable.

IV. Provision 3

Article XX. REALIGNMENT OF WORK FORCE AND REDUCTION IN
FORCE. Section 1.b. When reduction in personnel at any ROICC [Resident Officer
in Charge of Contracting] office is necessary, volunteers will first be
solicited from the force at reducing ROICC offices for no cost transfers to
specific gaining ROICC offices. If more than one (1) volunteer is received for
transfer to a single available position, selection will be made by seniority
based on service computation date of the employees at the reducing ROICC
office. In the event that no volunteers are obtained for the transfer, the
employee with the least amount of government service will be selected for the
transfer.

A. Positions of the Parties

The Agency contends that Provision 3 directly interferes
with its rights to hire, assign, and remove employees under section
7106(a)(2)(A) of the Statute, and its right to select employees from any
appropriate source under section 7106(a)(2)(C). According to the Agency, the
provision deprives it of its right to determine whether a given position should
be filled and who should be selected to fill that position. The Agency asserts
that the provision is not a negotiable procedure under section 7106(b)(2)
because the provision directly interferes with its rights to hire and
select.

The Agency further contends that the provision is not an
appropriate arrangement within the meaning of section 7106(b)(3). The Agency
argues that, by mandating the placement of employees during a realignment or
reduction in force without regard to the Agency's needs, the provision
excessively interferes with its rights to hire under section 7106(a)(2)(A) and
to select under section 7106(a)(2)(C).

The Union contends that the provision is a negotiable
procedure under section 7106(b)(2). The Union asserts that the provision
establishes "an equitable procedure for filling vacant positions after
the agency has already decided to transfer qualified employees from one ROICC
office to another. The duties and responsibilities of a transferred employee
remain unchanged; the only difference is where the work is performed." Reply
Brief at 7 (emphasis in original). Thus, the Union claims that Provision 3 does
not directly interfere with the Agency's rights to select and to hire.

B. Analysis and Conclusions

The right to assign employees under section 7106(a)(2)(A)
encompasses the authority to determine the particular qualifications and skills
needed to perform the work of a position as well as the authority to determine
which employees possess the requisite qualifications and skills. See,
for example, American Federation of Government Employees, AFL-CIO,
Local 738 and Department of the Army, Combined Arms Center and Fort
Leavenworth, Fort Leavenworth, Kansas, 33 FLRA 380, 382 (1988). In
addition, the discretion to decide whether or not to fill vacancies, or whether
or not to fill vacancies with bargaining unit employees, are components of the
right to assign employees and of the right to make selections for appointments
from any appropriate source under section 7106(a)(2)(C). National
Association of Government Employees, Local R14-87 and Department of the Army,
Kansas Army National Guard, 21 FLRA 905, 908 (1986). Where management
determines that it is necessary for employees to perform the duties of their
positions at a different location, however, a proposal setting forth a
procedure for determining which employees, from among the group of employees
who are assigned to the positions and possess the required qualifications, who
will be assigned to perform the work at the new location does not directly
interfere with an agency's right to assign employees. National Treasury
Employees Union and Internal Revenue Service, 28 FLRA 40, 43-44 (1987).
SeealsoInternational Plate Printers, Die Stampers and
Engravers Union of North America, AFL-CIO, Local 2 and Department of the
Treasury, Bureau of Engraving and Printing, Washington, D.C., 25 FLRA 113,
115-16 (1987) (Provision 4). Moreover, the Authority has held that when
management finds that two or more employees or candidates for an assignment are
equally qualified and capable of performing under the criteria management
elects to apply, the procedure by which one of the equally qualified employees
will be selected is negotiable under section 7106(b)(2) of the Statute.
Overseas Education Association, Inc. and Department of Defense Dependents
Schools, 29 FLRA 734, 793 (1987) (Proposal 46) (OEA, Inc.),
affirmed as to other matters sub nom.Overseas Education Association,
Inc. v. FLRA, 872 F.2d 1032 (D.C. Cir. 1988).

The Union contends that:

[Provision 3] does not undermine the agency's right to
fill or not fill positions made vacant by a realignment. Nor does the
[provision] involve the union in determining whether a realignment is even
necessary. Instead, the [provision] establishes an equitable procedure for
filling vacant positions after the agency has already decided to
transfer qualified employees from one ROICC office to another. The duties and
responsibilities of a transferred employee remain unchanged; the only
difference is where the work is performed.

Reply Brief at 7 (emphasis in original).

In our view, the Union's explanation of the provision is
not inconsistent with its plain wording. Nothing in the provision would require
the Agency to fill vacancies in one field office with unit employees from
another office, because, as the Union emphasizes, the steps prescribed by
Provision 3 could only be invoked "after the agency has already decided
to transfer qualified employees from one ROICC office to another." Id.
(emphasis in original). That is, if management decided to fill positions at a
given office by other means, including outside recruitment or promotion,
Provision 3 would not apply to the selection process. Further, if the Agency
decided to fill vacancies in one office with employees from another office,
nothing in the provision would require the Agency to transfer unqualified
employees. Instead, consistent with the Union's explanation, the provision
would apply only after the Agency decided to fill vacancies at one office by
transferring employees from another office and would apply only to qualified
employees.

Viewed in this light, Provision 3 concerns only the
location at which qualified employees will perform work previously assigned to
their positions. Stated simply, the provision becomes effective only after the
Agency determines to fill vacancies by transferring qualified unit employees.
Therefore, the provision does not require the Agency to fill positions in any
particular manner. Consequently, the provision does not directly interfere with
the Agency's right to assign employees under section 7106(a)(2)(A) of the
Statute. See, for example, National Treasury Employees Union
and Department of the Treasury, Internal Revenue Service, 14 FLRA 243, 257
(1984) (Provision 6). Additionally, because the provision is operative only
after the Agency's decision to reassign unit employees, it has no effect on the
right either to hire or remove employees under section 7106(a)(2)(A). That is,
where the Agency decides to fill positions, for example, through recruitment or
promotion, its right to hire or to remove unit employees is
unaffected.

Similarly, based on the Union's explanation, Proposal 3
does not directly interfere with the Agency's right to select under section
7106(a)(2)(C). As the Union points out, the provision applies only after
management has identified bargaining unit employees performing identical work
as the source from which positions at the gaining office will be filled. At
that point, the Agency has itself determined the appropriate source from which
to fill the vacancy. As such, the requirement that the Agency use seniority to
select qualified employees does not infringe on the Agency's right to make
selections from any appropriate source. SeeOEA, Inc, 29 FLRA at
791-93 (1987) (Proposal 46).

Provision 3 does not directly interfere with the Agency's
right to hire, assign, or remove employees under section 7106(a)(2)(A) of the
Statute or with its right to select from any appropriate source under section
7106(a)(2)(C) of the Statute. Accordingly, Provision 3 is
negotiable.

V. Order

The Agency must rescind its disapproval of Provision 1
and Provision 3, which were bargained about and agreed to by the parties at the
local level.(4) The petition for review as to Provision 2 is
dismissed.

FOOTNOTES: (If blank, the decision does not
have footnotes.)

1. As stated in NAS, Oceana, an agency's medical
authorities "may include an employee of the agency, or a medical authority
designated by the agency, or one with which the agency has contracted." NAS,
Oceana, 30 FLRA at 1125.

2. We are not here concerned with, and do not address, the
extent to which an agency may be contractually bound to observe medical
restrictions imposed by medical authorities, other than the agency's, pursuant
to a requirement of applicable law or regulation.

3. As we find that the provision clearly constitutes an
appropriate arrangement, it is not necessary to address whether, or to what
extent, it would be appropriate, in balancing the respective benefits to
employees and detriments to the Agency's exercise of its rights, to consider
the fact that the provision was agreed upon locally.

4. In finding the two provisions to be negotiable, we make
no judgment as to their merits.